The head of AIB's Polish banking division, Mr Michael Buckley, will replace Mr Tom Mulcahy as AIB's group chief executive when he retires next year.

The bank's board of directors has sanctioned the appointment of Mr Buckley (55) as group chief executive designate and he will assume the top job at the State's biggest bank in June 2001.

From Cork, Mr Buckley was long considered to be the firm favourite for the position, although AIB's chief financial officer, Mr Gary Kennedy, was recently mooted as a contender.

The bank will now turn its attentions to appointing a head of retail banking to replace Mr Kevin Kelly when he retires next year.

Mr Buckley's appointment did not come as any great surprise to the stock market and did not have any significant effect on the bank's share price. AIB shares closed at €11.70, up 15 cents.

Unlike Mr Mulcahy, Mr Buckley is not a career banker, having previously worked in stockbroking and in the Department of Finance before joining AIB in 1991. He initially joined the Public Service in 1967 and moved briefly to work as chef de cabinet to the President of the European Court of Auditors in Luxembourg before returning to the Department of Finance in 1981.

In 1986 he left that position to become a director of NCB Stockbrokers, the firm founded by Mr Dermot Desmond, and in 1990 he was appointed managing director of the firm.

The following year he joined AIB Capital Markets Division as head of investment banking. At that time Mr Mulcahy was managing director of Capital Markets and when he assumed the group chief executive's role in 1994 Mr Buckley took over his job.

One year later he was appointed to the AIB board and in 1999 he took over running AIB's growing Polish operations. This appointment was seen as an opportunity to provide Mr Buckley with some retail banking experience. During his tenure in Poland, AIB has expanded its banking presence and recently announced plans to merge the two banks it holds majority shareholdings in, Bank Zachodni and WBK, next year. The combined Bank Zachodni WBK group will be one of the largest banks quoted on the Warsaw Stock Exchange.

Mr Buckley has always enjoyed a high profile and has been a board member of the Custom House Docks Development Authority and was appointed by the Government to chair a body to review higher remuneration in the Public Service. He is a non-executive director of Commerzbank Europe.

He is married with one son and two daughters.